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1. Preheat your oven to 350°F (175°C) and line two baking sheets with parchment paper.
2. In a large bowl, beat the softened butter, 1/2 cup of granulated sugar, powdered sugar, and vanilla extract until light and fluffy.
3. In a separate bowl, whisk together the flour, baking powder, 1/2 teaspoon of ground cinnamon, and salt.
4. Gradually add the dry ingredients to the butter mixture, mixing just until combined.
5. In another bowl, beat the cream cheese, remaining 3/4 cup of granulated sugar, and egg until smooth and creamy.
6. Scoop out about 1 tablespoon of cookie dough and flatten it into a small disc. Place about a teaspoon of the cream cheese mixture in the center and wrap the dough around it to form a ball. Repeat with the remaining dough and filling.
7. In a small bowl, mix the remaining 1/2 cup of granulated sugar and 1/2 teaspoon of ground cinnamon. Roll each cookie ball in the cinnamon-sugar mixture until fully coated.
8. Place the cookies on the prepared baking sheets about 2 inches apart and gently press down to flatten slightly.
9. Bake for 10-12 minutes, or until the edges are light golden brown. Let the cookies cool on the baking sheets for a few minutes before transferring to a wire rack to cool completely.